On Ars Technica, Andres Bylund is giving us a real treat: Blockbusted! Movie rentals of today—and tomorrow compares the different means of renting a movie (at least, if you’re US-based; but most things ring quite true for the rest of the western world, too).
It’s a nice round-up. There’s definitely nothing wrong with it, but it’s a bit misleading, too. Because Bylund is comparing Apples to Oranges, and throws in some Bananas, too. The only thing WalMart, Blockbuster, Netflix et al. do have in common is movies. Which is a bit like pedestrians, trucks and a Porsche sharing just one thing: sometimes, you find them on a road. It’s good, but not good enough.
It’s a way of thinking coming straight out of a product world. But the important thing we need to apply is the use case, and the values behind it. In the as-of-today-world, comparing WalMart (DVD buy) and Blockbuster (DVD rental) doesn’t make too much sense. Not, because of WalMart’s target group. It’s just that people, who buy DVDs almost never rent. And vice versa.
I liked the comparison between Blockbuster and the local rental store, and how the latter did carve out its niche. But Neflix is a completely different beast. Not like hey let’s get a beer and rent a movie. It’s more like HBO without a schedule and some preselective choice (I might like to watch this or that movie later this month).
So what about VoD and downloads? Those two could be closely related. But don’t have to. Look at iTunes, as an example. it’s hyperconvenient, the store entrance is always right in front of your PC. You buy your song, you download it, you (kinda) own it. But it’s a dematerialized product. iTunes gift certificates range probably even lower than mail ordering a bunch of flowers. Uhm, thanks for not completetly forgetting my birthday.
Never forget: the physical world has its treats, too. Will VoD replace local rentals? Could be, should be and in all likelihood sooner or later it will dwarf the storebased rental business. But please don’t leave too much nacho crumbles in the matter transmitter.
Addendum: The NY Times on What Netflix Could Teach Hollywood
Which tells partly the tale from the long tail – but gives you a good idea in what kind of business Netflix really is: Out of the 60,000 titles in Netflix’s inventory, I ask, how many do you think are rented at least once on a typical day?
The most common answers have been around 1,000, which sounds reasonable enough. Americans tend to flock to the same small group of movies, just as they flock to the same candy bars and cars, right?
Well, the actual answer is 35,000 to 40,000. That’s right: every day, almost two of every three movies ever put onto DVD are rented by a Netflix customer. “Americans’ tastes are really broad,” says Reed Hastings, Netflix’s chief executive. So, while the studios spend their energy promoting bland blockbusters aimed at everyone, Netflix has been catering to what people really want — and helping to keep Hollywood profitable in the process.
Five million families now have Netflix accounts, and the company has basically reinvented the concept of a quick-turnaround mail-order business.
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